Botswana puts the brakes on diamonds

Botswana, Africa’s leading diamond producer, reduces production by 40% by 2025. Debswana, a joint venture between the Botswana government and diamond giant De Beers, has announced a 15 million carat reduction in the face of a global market in crisis since 2022. 

The causes: a collapse in demand and increasing competition from cheaper and increasingly popular synthetic diamonds. As a result, Debswana’s sales fell by 50% in 2024.

The impact on the Botswana economy is direct: diamonds account for 80% of exports and more than a third of the country’s tax revenues. Already in 2024, growth had slowed to 1%, compared with  2.7% in 2023, according to the IMF. The authorities are now forced to revise their economic forecasts downwards.

This crisis highlights the vulnerability of Botswana’s economic model, still largely dependent on a single resource. A wake-up call to accelerate the diversification of the economy, notably towards tourism, agriculture and financial services.

source: Africanews